Zinc also rallied until mid-morning, but then eased for the rest of the day, ending at $0.5256/lb., down more than a third of a cent. Aluminum peaked in the pre-dawn hours but sank through the day, just coming off its intraday low at $0.7759/lb., down three-quarters of a cent, while lead followed aluminum closely, winding up with a loss of a third of a cent, at $0.5259/lb.

Copper rebounded from a fresh 3½-year low to post a day of solid gains amid a great deal of short covering.

Still, most analysts continue to view the demand situation for copper as bearish, considering the extremely weak U.S. housing sector, concern about the possibility that U.S. automakers won’t get the government bailout necessary to avert bankruptcy, and surging London stockpiles.

Inventories monitored by the LME rose again yesterday, gaining another 1,500 metric tons, to 283,125 tons. Stocks are up about 20% already in November. On the other hand, Shanghai copper stocks fell 3,797 tons, or 18%, a drawdown somewhat greater than expected, but not enough to offset rising stocks elsewhere, and a growing international surplus.

Concerning aluminum, traders are “pricing in expectations of further stock builds, which we concur with,” wrote Barclays Capital analyst Gayle Berry in London. LME aluminum levels are at their highest since December 1994.

Meanwhile, prices of nickel and zinc have fallen too low to cover costs for perhaps half of the world’s production of the metals, says Eugen Weinberg, an analyst at Frankfurt-based Commerzbank. Production cuts will help stabilize prices of industrial metals for the next three to six months and “as soon as China’s demand picks up, prices will pick up,” Weinberg believes.

In company news, Canadian mining giant Teck Cominco announced it will slash spending, suspend dividends, sell assets, and withdraw from the Petaquilla copper project in Panama in an effort to ease the debt burden generated by its acquisition of Fording Canadian Coal Trust.

But on the optimists’ side, HudBay Minerals has unveiled a plan to buy Lundin Mining Corp, in a friendly deal that “creates a new Canadian leader in mining.” To replace Teck?  We’ll see.

Source:

The base metals were mixed on Friday. Copper bottomed below $1.48 in the pre-dawn hours, but then pushed higher until the late morning, when it came off its highs to finish at $1.5752/lb., up 5½ cents. Nickel rose from the pre-dawn hours to mid-morning, trailed off, but then rallied late to close at $4.5503/lb., up 9¼ cents. Zinc also rallied until mid-morning, but then eased for the rest of the day, ending at $0.5256/lb., down more than a third of a cent. Aluminum peaked in the pre-dawn hours but sank through the day, just coming off its intraday low at $0.7759/lb., down three-quarters of a cent, while lead followed aluminum closely, winding up with a loss of a third of a cent, at $0.5259/lb.

Copper rebounded from a fresh 3½-year low to post a day of solid gains amid a great deal of short covering.

Still, most analysts continue to view the demand situation for copper as bearish, considering the extremely weak U.S. housing sector, concern about the possibility that U.S. automakers won’t get the government bailout necessary to avert bankruptcy, and surging London stockpiles.

Inventories monitored by the LME rose again yesterday, gaining another 1,500 metric tons, to 283,125 tons. Stocks are up about 20% already in November. On the other hand, Shanghai copper stocks fell 3,797 tons, or 18%, a drawdown somewhat greater than expected, but not enough to offset rising stocks elsewhere, and a growing international surplus.

Concerning aluminum, traders are “pricing in expectations of further stock builds, which we concur with,” wrote Barclays Capital analyst Gayle Berry in London. LME aluminum levels are at their highest since December 1994.

Meanwhile, prices of nickel and zinc have fallen too low to cover costs for perhaps half of the world’s production of the metals, says Eugen Weinberg, an analyst at Frankfurt-based Commerzbank. Production cuts will help stabilize prices of industrial metals for the next three to six months and “as soon as China’s demand picks up, prices will pick up,” Weinberg believes.

In company news, Canadian mining giant Teck Cominco announced it will slash spending, suspend dividends, sell assets, and withdraw from the Petaquilla copper project in Panama in an effort to ease the debt burden generated by its acquisition of Fording Canadian Coal Trust.

But on the optimists’ side, HudBay Minerals has unveiled a plan to buy Lundin Mining Corp, in a friendly deal that “creates a new Canadian leader in mining.” To replace Teck?  We’ll see.

Source: Base metals mixed – Zinc and nickel seen selling below cost of production

Nickel briefly dropped below $5 during the pre-dawn hours, but pushed higher through most of the day, closing at $5.4817/lb., up nearly 24 cents. Zinc zigged and zagged to little ultimate effect, ending at $0.4876/lb., down less than a half-cent. Aluminum lost ground, shedding more than a penny, to $0.907/lb., while lead was strong, adding almost 2½ cents, to $0.6864/lb.

In a mixed day for the industrial metals, copper finished up its worst month in thirty years, losing 36% in October on concerns about the slowing global economy. No one is giving it much of a chance for a rebound anytime soon, either.

“The outlook for demand doesn’t look good,” said Triland Metals trader Michael Khosrowpour. “China seems to be one of the saviors around but at the same time there are a lot of other economies that are shrinking.”

Donald Selkin, of National Securities Corp. in New York, concurred, saying that, “There are some headwinds in the economy that will continue to pressure copper … It will keep trading around these lower levels.”

Advancing stocks also played their role in copper’s decline. Inventories monitored by the LME shot up 6,775 metric tons yesterday, to 239,650 tons, the highest level since mid-March of 2004.

Unsurprisingly, Citigroup slashed its 2009 copper-price forecast by 45%. Copper will average $2 a pound next year, Citi now says. That’s a steep downward revision from the previous forecast of $3.65/lb.

Meanwhile, LME aluminum stocks also jumped, gaining 1,150 metric tons yesterday, to 1.5 million tons.

Regarding zinc, the Chelyabinsk Zinc Plant, Russia’s largest zinc producer, said yesterday it has abandoned plans to develop a mine near its main production asset and will slash investments after cratering prices led to a first-half loss.

And Brazil’s mining giant, Vale, said yesterday it will cut its iron ore output by 10% percent from November, in response to the deteriorating global economy.

Source: Base metals mixed – Aluminum, copper stocks on the rise